Catching Customers on the Web

From bakeries to ski resorts, businesses are setting up shop on the Web. Should you?

Like the wine it produced, the winery was young. Its first vintage had gone into the bottle in 1992. With just $400,000 in annual sales and not enough money to market its wines through national distributors or gourmet magazines, Clos LaChance Wines, in Saratoga, Calif., needed an innovative marketing scheme.

Then an old friend called and offered to help Bill Murphy, the owner and founder of Clos LaChance, create a presence on the Internet, the worldwide network of almost 4 million computers, used by an estimated 15 million to 30 million people. Better still, the friend offered to help the wine company set up shop on the most innovative part of the Internet, the World Wide Web. Murphy jumped at the chance, and Clos LaChance became one of more than 1,800 companies to establish a presence on the Web.

For years computer gurus have been predicting that most customer-oriented aspects of a business -- from advertising to marketing to sales -- would be handled over computer networks. While it's not hard to picture companies in high-technology industries managing customer transactions electronically, it's more difficult to imagine businesses in other industries doing so.

The Web is changing all that. Easy to use, it has lots of color and graphics, and the kind of intuitive structure lacking in all but the most recent computer software. By virtue of its remarkable growth rate -- by the end of 1994, Web sources estimate, it had more than 2 million regular users -- the Web is rapidly turning into a true commercial network. From oil companies to real estate brokerages, from bakeries to ski resorts, businesses are setting up shop on the Web. It may make sense for you to do the same.

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Once you get the right software and a special phone account with an Internet service provider, the Web is much easier to use than a conventional computer network, including most of the Internet. Instead of having to cope with a clumsy interface, Web users simply type the address of the site they want to visit.

Type Clos LaChance's Web address into your Web browser software and a blue-and-white image of the company's label appears. Called a home page, this is the Clos LaChance storefront on the Web. But what you see is just the first of several layers of information. Beneath the image lies the company's postal address, followed by a one-paragraph description of the types of wine the company produces and what makes its wine special. Between the address and the description is a highlighted line mentioning the company's "holiday giftpak." The highlighting means that the line is linked to another page of information. Clicking there once with your mouse brings up an order form.

Just because the Web has some 2 million users, of course, doesn't mean that 2 million people will suddenly begin to buy Murphy's wine. The challenge for any small-business owner on the Web is to turn browsers into customers. What distinguishes a Web page from a yellow-pages ad is the additional information that the Web page provides. Buttons on Clos LaChance's home page, for instance, connect to pages called News, Products and Services, Company Overview, and Contact and Support. Murphy hopes those infomercial pages will persuade browsers to buy his wines when they read, for example, that his 1992 chardonnay sold out after receiving a favorable review in the Wine Spectator. A Web page can create an aura around the product itself much more vividly than the average label.

Another appealing feature of the Web is hypertext linking, which allows you to move to related topics both within and between sites. When you click on a designated button, you zip to another page within the site or even to the home page of a different site. That capability gives the Web an ease of use that brochures and conventional computer networks can't match.

Like many other small-business owners, Murphy is finding that it costs little to establish a presence on the Web. He pays $50 a month to an Internet provider to rent space. His Web storefront is drawn from a marketing brochure that a friend made computer-ready at no charge. "If the page starts to bring in new customers, I'll pay him a percentage of sales," notes Murphy.

Best of all, the Web levels the playing field, says Murphy. "We're a little bitty guy. We cannot compete from an advertising standpoint with [much bigger wineries like Robert] Mondavi." But on the Web, he says, "our information will be as accessible as theirs."

Aspen Skiing Co. represents another type of business you might not expect to find on the World Wide Web. The company runs four ski facilities in Aspen, Colo. With more than $50 million in revenues in 1994, it is large enough to put a lot of money into advertising and marketing, but it has laid out virtually no money to set up its own Web page. Its purpose in establishing a Web presence is twofold: customer service and marketing.

Aspen Skiing's aim is to use technology to distinguish itself from other ski facilities. Aspen SmallWorks, a research-and-development lab connected with Sun Microsystems, in Mountain View, Calif., has set up kiosks with touch-sensitive screens at Aspen Skiing's four locations to show visitors the view from the top of local mountains and to give them up-to-the-minute weather reports.

The ski company is trying to do something similar for its customers -- before they ever leave home. With the help of Aspen SmallWorks, it has set up a Web page, based on its brochure, that informs potential customers about its prices and the specifics of its rooms and tour packages. It plans to include weather reports updated daily or even hourly. And ultimately, it intends to use the graphical power of the Web to show each customer the actual room he or she is reserving -- and the view from that room.

Aspen Skiing set up an Internet presence -- an E-mail address in its literature and a Web page -- as an experiment, says marketing vice-president Kitty Boone. The early results have been encouraging. "My sense is that it's already paying off," says Boone. "If that's how our customers want information, it's our job to provide it that way." She notes that the trend now is away from mass marketing and toward very tailored direct-marketing communications, which answers questions a radio ad or a general brochure can't address. "The Internet will take direct marketing a step further," she says.

The response to Aspen's posting suggests that the Web can be an especially powerful tool for reaching customers, even compared with ordinary E-mail. After including its E-mail address in a postal mailing that went out to 200,000 visitors, Aspen received only 300 electronic communications requesting further information. In contrast, Web users interact with the company's Web page more than 5,000 times a day. Although it's too early to tell what percentage of those browsers are potential customers rather than just joyriding college kids, Boone considers that hit rate a success in itself.

Among New Yorkers, Zaro's is a household name. A bakery chain with annual revenues of $20 million and 12 retail outlets in places as conspicuous as Grand Central Station, Zaro's is so popular that it rarely bothers to advertise. But owner Joseph Zaro makes an exception for the World Wide Web because it offers his company an opportunity to do something at a reasonable cost that ordinary advertising can't do: reach customers across the country and perhaps even around the world.

After reading about the Web in news items, Zaro called the Pipeline Network, a Web access provider in Manhattan. He took the initiative, he says, because the Web seemed like a low-risk way to tap a potentially vast national market. "Our initial investment will not exceed $15,000 the first year," says Zaro, a self-proclaimed techie.

Getting on the Web is attractive to Zaro because of the economics. "I'm pretending this is another store," he says. "But I don't have the capital expenditures of building a store" -- about $500,000. "It's a no-brainer," he adds. "I think it will be really big for us."

When his Web page becomes available in the summer of 1995, Zaro plans to advertise only 5 to 10 of the thousands of baked goods and other foods his company produces. After six months he will look at the results and decide if the effort was worth it. If the cost of maintaining a Web presence is less than 10% of the sales that it generates, Zaro says, he will put more money into the page.

An oil-and-gas-exploration company may not seem like a prime candidate for the latest trend in marketing. But don't tell that to Prospector Petroleum, in the Woodlands, Tex.

Prospector, which is projecting revenues of $8 million in 1995, up from $5 million in 1994, is on the Web for one purpose: finding investors. The task is a little like looking for a needle in a haystack. Surveys show that the company's ideal target groups -- professionals such as physicians and attorneys, and well-off retirees -- are not using the Web in large numbers. A Georgia Institute of Technology survey reported that the typical Web user is a 30-year-old, educated, North American male who works with computers; technical professionals and university students together make up 53% of the user population.

But David H. Mangum, a consultant for Prospector who helps match potential investors with exploration companies, was convinced that the chances of picking up the right kind of Web user were great enough to justify Prospector's investment in the Web. Mangum spearheaded the effort, putting up a Web page that, like many early offerings on the Web, consisted largely of information pulled from the company's brochure. Interspersed with graphics of oil rigs, the page describes some of the company's past successes and suggests inducements to invest.

But after two months on the Web, Mangum had received no inquiries. "If you don't have flashing lights, people will just drive by you, and they won't know you're there," he says. He tried posting notes about the page elsewhere on the Internet -- to no avail. Finally, Mangum guessed that his Internet provider wasn't doing enough to attract people to its Web sites. So he switched to a provider with more Web experience. During the first weekend, Magnum received 41 inquiries.

Despite that encouraging sign, Prospector's president, Warren Evans, remains somewhat skeptical of the Web's likely payoff. "The users are just tire kickers. They're not there to invest." Still, Evans says he is willing to sink $10,000 into the Web in the first year. After that, he will pull the plug if his advertising has not shown results.

Like many dabblers on the Internet, Arnold Kling has been convinced for several years that the Net offers an ideal medium for commerce. But unlike the dabblers, Kling was willing to stake his career on his convictions. He left a secure job to start a one-person real estate and mortgage-matching service on the World Wide Web.

Kling's business takes advantage of some of the Web's chief assets, like its accessibility from any geographic location and its ability to generate large amounts of information organized into manageable pieces. For $25,000, Kling put together all the hardware and software he needed to set up Homebuyer's Fair, a Web site that seeks to match up home buyers, real estate agents, and mortgage lenders. "I want to give people the same experience they would have at a county fair," says Kling. "They can see booths from lenders, from home builders, and eventually from title-insurance companies and others, and also get a lot of general information."

Kling's home page is one of the more sophisticated infomercials on the Web. Potential buyers who call it up can get details about homes available in select metropolitan areas in the United States. They also have access to more than 100 pages of timely information on home buying, including what to look for in a home and areas in the United States with the best mortgage rates.

Kling contends that providing such information is what distinguishes his business from traditional brokerage houses. The information "gives prospective buyers a reason for using the service," he says. "It's not just the market information. It's the answers to questions like, How do I buy a house? How do I apply for a mortgage? Where do I write for important publications?"

More important, Kling adds, that kind of information is what keeps people coming back. If a company can't put up a Web page that captures and holds users' interest, he observes, potential buyers will take their business elsewhere. "It's not like people get on the Web all psyched to shop," he notes. Instead, he says, they have to see an advantage to doing business with a company on the Web.

Even if it takes years for the Web to realize its full potential, many business owners figure they have little to lose and everything to gain from learning how best to exploit it. "As time goes on, this me-dium will have a major impact on how people get information and buy products," says Murphy of Clos LaChance Wines. "We don't have huge expectations in the short term. I just want to get in and learn." It's hard to see the flaw in that strategy.

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Steven Dickman (etonai@aol.com) is a freelance writer based in Cambridge, Mass.

DESIGNING A WEB PAGE

Once you've decided to set up shop on the Web, you'll need to figure out how you want your pages to look and what information you want to include on them. The best sources for ideas are other companies' pages. Go in as a consumer, and see what would persuade you to purchase a product or a service marketed on the Web.

At this point, you have two options: you can hire a consultant to design your pages or you can design them yourself. Even if you've had a lot of programming experience, you might want to seek outside help. Most consultants will give you some guidance for free, says consultant Phil Kratzer of the National Response Corp., in Dallas, especially if your company has annual sales of more than $1 million and you have done some homework. Should you decide, however, to write your own code, you can use one of several software packages. (See Resources, next page.)

LOCATION, LOCATION, LOCATION

Because it's easy to move from site to site on the Web, you might think that users would find all sites equally attractive. But location can be just as important on the Web as on the ground. Indeed, dozens of malls have opened up on the World Wide Web, and they're rushing to assemble lists of companies whose Web pages are accessible primarily through Web mall sites. That way, just as in real shopping malls, a person who enters an on-line mall interested in buying sporting goods might wind up taking home two pounds of coffee and a vacuum cleaner.

Companies that wait too long to sign up may find themselves shut out of the most popular malls. "Six months from now, people will figure out which sites are more interesting than others," predicts Jason Olim, the cofounder of CDnow!, a Philadelphia-based CD retailer accessible through the Web's Downtown Anywhere mall. Some companies, like Zaro's bakery, are already seeking listings on several Web malls. Better safe than sorry.

RESOURCES

Books The Internet Business Guide, by Rosalind Resnick and Dave Taylor, SAMS Publishing, 1994, $24.95, 418 pages. Well-organized, practical information, with useful appendices and graphics-rich examples of how businesses are using the Internet.

The Internet Business Book, by Jill Ellsworth and Matthew Ellsworth, John Wiley & Sons, 1994, $22.95, 376 pages. A text-heavy primer that leans more toward written descriptions than graphics. Not much information about the Web.

Using the World Wide Web, by Bill Eager, Que Publishing, 1994, $27.99, 512 pages. A full-blown encyclopedia of Web sites and other information, organized into useful topics such as "How to Create a WWW Home Page." Includes brief user guides for the most popular Web browsing software.

Web Access and Software In January Prodigy began offering access to the World Wide Web, and other commercial on-line services, such as America Online and CompuServe, are planning to follow suit. You can also get on the Web through an Internet phone-access account called a SLIP or PPP account. You can obtain a comprehensive list of access providers by E-mailing a request to info@internic. net. Here are two providers that offer Web access from most major cities:

Performance Systems International (800-774-3031). The $99 setup fee includes the cost of software and one free month of service; then it's $29 for 29 hours of use a month.

For software, most newcomers to the Web are better off buying one of the easy-to-set-up commercial packages. Two are Internet Chameleon, from NetManage, and Internet in a Box, from Spry. Internet Chameleon has the longer track record and the higher price tag ($199 list; 408-973-7171). Internet in a Box is easier to use, has more features, and costs less ($149; 800-557-9614).

More advanced Web users who want to design a Web page will need software that provides the Hypertext Markup Language (html). These are the two most popular packages for writing documents in html:

HTML Assistant. Available from Brooklyn North Software Works (902-835-2600) for $99.

HoTMetaL. More sophisticated than HTML Assistant but harder to learn. $195 from SoftQuad (800-387-2777).

Business Directories One of the best directories of companies with Web sites is a Web site itself. As usual, you get there by typing the site address, or in Web lingo, the URL: http://akebono.stanford.edu/ yahoo/

The directory includes thousands of businesses and their Web addresses organized by industry.

Malls Some entrepreneurs are trying to match retailers with customers on the Web by starting malls, which, like real shopping malls, offer a variety of products and services grouped together at one location. An example is Downtown Anywhere, one of the earliest and fastest-growing malls. Its address: http://www.awa.com

Consultants Hundreds of consultants advise businesses about using the Internet and the Web. Two of the more experienced are National Response Corp., Dallas, 214-458-7625; and Electric Press Inc., Reston, Va., 800-993-5773.

Tip: Don't try to get on the Web with anything less than a 14.4 modem; the response will be excruciatingly slow!